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Contracts Keyed to Burton
Nanakuli Paving and Rock Co. v. Shell Oil Co.
Citation:
664 F.2d 772Facts
Nanakuli Paving and Rock Company (hereinafter “Nanakuli”) (plaintiff) bought all of its asphalt requirements from Shell Oil Company (hereinafter “Shell”) (defendant) from 1963 to 1974 pursuant to various long-term supply contracts. Nanakuli believed that price-protection, as a usage of the asphaltic paving trade in Hawaii, was incorporated into its 1969 agreement with Shell. Shell, however, failed to price-protect Nanakuli due to an Arab oil embargo that shortened supplies and a change in the command and policy in Shell’s asphalt management. Due to the structural changes within Shell, the new management lacked knowledge about the peculiarities of the Hawaiian market, the long-time relations with Nanakuli, or the 1969 agreement. Nanakuli sued Shell.
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